Monday, June 06, 2005

While lobbying for some cross-team feature political support in one of the prettiest cafes on campus (34, what a view) I noticed a setup for a presentation. I wandered down and saw it was for Bob Herbold, swinging through campus to talk about his book, The Fiefdom Syndrome. Free chips and candy bars? Plop.

So Mr. Herbold begins a very nice presentation about how business groups grow and then stifle progress by continuing to produce work and process to justify their ranks. These groups are especially prone to sticking with old methods that require lots of process intensive labor, vs. switching to new or disruptive approaches that promise to save time, money, and require less people. Lots of real world examples, some even based on his time a Microsoft bustin' up stagnant groups. I was so intrigued I ended up laying down some cash and reading the book. More on that below. First, let's have the dessert of this post.

During the Q&A, a young lady asked Mr. Herbold how all of his principles and insight would apply to present-day Microsoft. Bob took a pause and showed restraint mixed with reluctance. He apologized for his answer being vague, but basically he said, "Microsoft has hired lots of people since 2000. It's unclear to me what their level of focus is."

My inner self's eyes sproinged all big and anime and clasped its hands to a throbbing heart, sighing, "I'm in luuv puppy luv!" But then Bob stopped there and didn't take the assessment much beyond its promising beginning. Tease.

So Mr. Herbold isn't outright calling for massive layoffs and reorganizations at Microsoft, but his book does cover how you have to look out for parts of your organization that grow and then put intensive effort in to justify their current size and even try to grow more. Much like a zealous GM or VP out to create busy features or absorb other teams when the right thing to do is actually downsize their team to something manageable (or to break-up the team entirely).

Here's one of the biggest so-common-sense-it's-not-common-sense observations I got out of the book: smart people figure out quickly how to succeed and be rewarded in their group. Chapter two is all about human nature. People don't typically get rewarded by being disruptive pains in the ass but rather getting along to get along and further up the compensation ladder.

Sounds simple. Sure enough, if you are rewarding people for demonstrating that they excel at process excellence then, well, Hell, forget if you actually ship features. Look at all these pretty, beguiling graphs about promising features! And fetch me a crop of dithering middle managers! If you openly reward and promote people for killing work by bemoaning the risk and the testing cost and localization impact of each feature and interrogating a DCR as if it were Dan Brown shackled in-front of a wild-eyed, hot-poker wielding Pope, well, everyone is going to grab pitchforks and jump on that "No can do! No can ship!" bandwagon.

It makes me think of how many feature meetings I've had and what a small percent of those features have actually ever shipped. Not that every feature is a good idea, but it's damn near wake-worthy sometimes for a feature to actually get out into shipping bits. Que Eeyore: "Oh no. Now we have to support it. I suppose a hotfix request will come in any moment now..."

Anyway. Other interesting bits I'd like to call-out in the book...

Fiefdoms are bad. They result in stifled organizations that freeze up and let competitors breeze on by. They lead to inefficiency and ineffectiveness, reducing market share and profitability. They breed mediocrity.

The folks in charge of the fiefdoms jealously guard their high-performers, not letting other groups know about the people they value most, less that fiefdom lose a key contributor (to whom they might give so-so feedback to). Folks gravitate towards a comfort zone and stridently maintain the status quo. Once another leaner, meaner innovative group or competitor comes along, the fiefdom plain can't compete and while it might save a little bit of time from obsolescence via plain mean business or political tactics, the folks who snuggled down into the comfort zone and jellified themselves to mediocrity usually end up out of a job.

I like this observations (pg. 82 [hardback]): "If you leave people in the same job for too long and allow them to become too comfortable, without encouraging them to grow and learn, they lose the capability to renew themselves and think about alternative ways to get the work done. They become a liability for the company rather than an asset."

In chapter four, he recounts a company that started measuring "good" and "bad" attrition. I'm pretty sure he means Microsoft because we started that given all the good people leaving the company and all the bad clunkers we really need to fire but don't seem to have the gumption to. Usually when Bob talks about Microsoft he calls us out specifically. Not here. Also in that chapter he mentions the "360 assessment." I think everyone who has been at Microsoft for five years should get a lightweight one of those as a reality check.

Interesting at the beginning of chapter five where Bob mentions all the points of the company where it "touches" customers and consumers that he doesn't mention product support (e.g., PSS). Curious. Given the recent horror stories coming out of our gutted support group, I guess you can see an executive leadership pattern of disdain for support ("Oh, let them Google-it, I mean, Butter-fly it - well - MSN search it - grr, you know what I mean.").

I'm back to luuv in chapter six on the section "Fiefdoms and Six Sigma." When you're dealing with people shooting you with process arrows and telling you all the reasons why we can't ship a feature, it's always nice to have a quote like "'Why didn't you tell me that we weren't interested in exciting the customer, that we're interested only in making this thing risk-free and cheap?'" ready to go. Oh, dang, that could be applied to so many circumstances here. And this just feels like Courvoisier slipping around my cortex when I read it, "The mistake the CEO made is that he created the perception that the company's primary objective was excellence in Six Sigma as opposed to excellence with their customers."

Reorganization plays a part not only in bustin' fiefdoms but also ensuring that they never form. I've got notes all over chapter eight, "Fostering Creativity," and I could quote it to an extent that I'd feel guilty of retyping most of the chapter. Oh, but there are some goodies in here, like: "What fiefdoms do is constantly load people down with excess training and communication, handicapping them with the mediocrity that the group has become comfortable with. Strong performers tend to see what's going on pretty quickly and work to get out of that environment." Ba'zing! Lost any strong performers lately? And how much process do you have to deal with given just three or five years ago? Lots of videos to watch as part of complying?

Section five of this chapter is "Don't overcomplicate the process" and it's super-duper great. As is the next, "Focus on customer needs, not meetings and memos."

"...you can't develop a process to generate innovation."

"[Process meetings] were eating up big chunks of time."

"...the focus of the discussion has to be on understanding consumers, probing for areas of consumer dissatisfaction, and looking for areas where you can surprise consumers with new capabilities."

In the end: any process you have needs to have its end result around generating something great for your consumers. If your process doesn't benefit your customer, what the hell good is it? (my, ah, paraphrasing.)

Curious note about BillG (pg. 72): "Bill Gates constantly looks for problems. He looks at everything that happens on a day-to-day basis and asks what Microsoft needs to improve upon." I'd love to know some of his answers to this as of late. Because the way things are looking, he must be considering some damn peculiar questions.

Do I recommend the book? Yes, if you're out to bust some fiefdoms up. There is lots of damning measuring sticks you can pull out from this book, and probably it has a tad more cachet than most business books given Mr. Herbold's personal association with the company. What are some of the lessons I think that applies to Microsoft and its product divisions:

We need reorganization bad. And we need to reorganize into smaller, leaner, meaner groups.

Process that doesn't briefly answer the question "How does this benefit our customer" has to be dropped.

Get rid of your middle managers. Okay, I slipped that one in. But, like Christine Gregoire saw, if you have a bunch of middle managers, you probably have a bunch of bureaucratic process requiring their presence to keep shuffling information around. Get rid of them and the process at the same time. Gov. Gregoire has 1000 middle manager positions up for elimination. I bet we can meet that!

Strong performers get screwed if they end up in a fiefdom. Your bosses don't sing your praises, worried that someone might try to steal you away to their group. If you've read this far (wow!) one thing you need to do when you show up at work is assess if you're stuck in a fiefdom. If so, and you're not able to break it apart, get out. Just imagine the voice in the Amityville house has finally managed to whisper in your ear, "Get out!"

You need to switch jobs and responsibilities before you get comfortable doing what you're doing and start down a one-way path of career atrophy. Microsoft used to force this through reorganizations. But people are snuggling down, like ticks.

And going back to Mr. Herbold's hesitant observation during his presentation: yes, Microsoft has indeed hired a lot of people since the year 2000 and their focus, and their purpose, is very unclear. Would we have shipped Longhorn any later with less people? Nope. Probably sooner because we wouldn't have dreamed of doing all that dumb-ass CLR-based stuff that ended up being cut. Does Office need all those people to add a reading view to Word? We can get by with so many less people, because at the end of the day, it's the super contributors responsible for most of the features that get designed, implemented, tested, shipped, marketed, sold, and supported.

At least roll the payroll numbers back to year 2000 levels. Let Gretchen focus more on firing hiring managers vs. having to rant about their spoiled, whiny ways. Let researchers go back to working for colleges and mentoring future generations of software developers. And bust the stagnant mediocrity we've snuggled into and get out there and start wowing consumers with delivering what they want, need, and didn't even know could be done.

45 comments:

Anonymous
said...

Excellent post - lots of suggestions not just criticisms (for those who think you can't do both). My concern is that Ballmer was the one who broke the traditional MSFT restraint and hired all those folks (of unclear ability and imprecise mandates). So I see it as unlikely that he'll turn around and start laying them off. Shit, they just finished approving a massive multi-year expansion of the campus and didn't I just hear that blowhard Simon Witts pissing off all our partners by saying he's going to increase our enterprise sales force by another 50%+? While I'm on that topic, why did we put someone in charge of enterprise customers and partners who clearly has no respect for either? Oh right...Ballmer likes him so who cares about external perceptions/damage. Anyway, keep up the good work Mini. Someone's gotta listen and act eventually - I suspect it'll be shareholders at this rate.

ROTFLMAO. Yeah Mini, don't you know that MSFT's problems are basically invisible externally? After all, no one has noticed that while we've been jerking off, Apple has come from behind to now lead our OS in many areas. Or that we're still 2 years out from shipping our next rev despite having been at it for 5 years already. Or that growth is slowing and the stock is in serious need of Viagra. Just talk to your mgr or HR about it. They'll embrace the message and you won't be fired - honest. I'll bet my career on it. Well... actually I'll bet your career on it. Meanwhile, remember, only happy faces externally - we won't fix any problems but at least the charade may continue for a few more vesting periods.

A lot of us HAVE been complaining to HR or our manager about problems like this, and the standard response is to ignore the criticism and treat the messenger as an anti-team member (and if you go this route, you're likely to see a hit in your review). Most managers, for the reasons Herbold illustrated, simply don't want to hear about or don't care too deeply about the problems.

"Maybe that will get them to pay attention. They want the stock price to go up too you know."

Maybe? Should he play up the customer imperative or simply spell out the connection to the stock price to increase his odds of them listening? Too funny. Most of this is simple common sense. The fact that so many of MSFT's mgrs - including senior ones - don't appear to get it despite being told, really lends credence to Mini's concerns about the caliber/value of these folks in the first place. You note that these mgrs want the stock to go up too. Don't they realize that delighting customers again is the ante for that? Or are they deluded enough to think there's some alternative path that will require less work?

1. HR are a bunch of hapless, helpless figureheads. If you want your concerns to be used against you at a later time (like reviews), pull up a chair and air it out.

2. Mgrs are no less worthless. Even Herbold didn't want to hear bad news when he was COO....I brought him some one day back in the days and got an earful for it. Learned my lesson real well.

3. In a perfect world, all employees should try and work themselves out of a job. But you don't get rewarded for coming up with a better way that might eliminate layers or whatever. You get rewarded by adding layers, adding heads, building fiefdoms. Brilliant!

To the AC touting X over XP:Data encryption probably shouldn't be one of your bullets if you want to make an argument about X's security features. It's less flexible than EFS and Windows has had EFS since Win2k.OTOH, "easy-to-use* encryption of your homedir" might make a nice bullet. Or pick any number of other compelling security features in OSX. I like their new mini-certificate authority. I'm not the only one who thought "cool think of the PKI possibilities and think different and all that (but why don't we have something like it?)".

..."What fiefdoms do is constantly load people down with excess training and communication... Strong performers tend to see what's going on pretty quickly and work to get out of that environment..."

Hear, hear! And I am acting on that advice. I've had two years of my best performance ever; three mini-products shipped, perfect customer sat scores, multiple competitive wins ...And I've had two successive 3.5 review scores, because I didn't play the game correctly in our particular fiefdom.

I'm out. I'm going to a software company that's young, small-ish, and customer-driven; "process" is what they use to do things for customers, not what they use to create papertrails for meaningless reviews.

Just make it end already. MSFT's decline is like watching a slow motion train wreck - you know it's inevitable, you know a lot of people are going to get hurt, but the worst thing is waiting for that initial impact...

"And I've had two successive 3.5 review scores, because I didn't play the game correctly in our particular fiefdom"

That's because Steveb has mandated a bell curve on review #'s from way back when. He has told HR that they must manage the review model to pre-determined numbers. The argument for is it helps to manage budgeting. Argument against is what if you really have seven 4.0 performers but the model says you can only give three 4.0 review scores? Well, if you are a weanie Mgr. you screw four people over....most get pissed but stay anyways and now join the ranks of disgruntled employees who are no longer passionate about their work. Work product begins to suffer, crappy products get shipped, who cares any more?? If you are a principled Mgr. you take on the system and go to bat for your seven key employees but invariably you will get shut down and most likely commit a career no-no...now you too are inside the bell curve.

Oh, the tales so many of us can tell--entire organizations and disciplines (production/publishing team for a UE org in this case) given 3.0s because their work wasn't considered strategic. Then the whole team (surprise) decides to leave, and it's then impossible to get an HTML page published with any competency. This was 6 years ago or so--since then I haven't heard of anything so egregious. I hope this doesn't happen anymore, but since management corruption remains pretty rampant, I am skeptical.

I'm a line manager, and I view my most important task as representing my employees during the review process to make sure they're treated fairly. This doesn't mean they all get 4.0s, but it does mean that they don't get screwed, either.

I have recently been thinking it might be interesting to score teams on their effectiveness as a whole. If we did team reviews as well as individual reviews, and team scores affected rewards, managers would really scramble to get low performers off their teams. In this system, a 3.0 on a high performing team might get a better bonus and stock award than a 4.0 on a team that did a science project and shipped nothing.

I'd like to know if the executives who run teams that are woefully behind (Yukon, Longhorn) get 3.0s when their products fail to ship.

I'd like to know if the executives who run teams that are woefully behind (Yukon, Longhorn) get 3.0s when their products fail to ship.

No, they don't. Executives work on a completely different reward model than the grunts, and the rewards are (comparatively) obscene, whether or not the groups they own ship on time. They operate on a different plane, you really can't compare the two incentive structures.

Argument against is what if you really have seven 4.0 performers but the model says you can only give three 4.0 review scores?

*This* is probably the second biggest problem (next to poor leadership) at the company. It's just a variant on a zero-sum game. The better I do, the less chance you have of being rewarded. Managers who have put together a great team often keep a few poor performers on board so they don't have to screw over the guys who worked hard but who didn't achieve superstar status. As a lead, it's one of the most painful experiences at work to have to give a review back to someone and say "you worked hard last year and accomplished great stuff...I can't tell you how much I personally appreciate it. However, the review model came back down the chain and the best I could do is get you a 3.5 (or *shudder* a 3.0)". Nothing kills morale faster. It assumes all cogs at all levels are equal with similar managers and similar circumstances solving similar problems with similar constraints. The truth is, the guy across the hall from you might have worked half-as-hard and still pulled a 4.0 because of how the model went up and down the chain. A good lead will fight, yell, scream, beg, cajole, and even threaten to get the scores he believes his guys have earned, only to have those scores crapped on by upper management and their curve. Over time, the system turns into one of people co-operating publicly, but holding back privately. As Herbold said, "smart people figure out quickly how to succeed and be rewarded in their group".

And, just as an aside, I never really understood what is so horrendous about a 3.0. It says "you did what was expected of you". There are a lot of good solid people that just want to do a 9-to-5 job and go home to their family. They do fine work. They often do the less interesting (but necessary!) jobs that the superstars avoid. Yet, they get punished (try getting three 3.0s in a row and see how long you last). Why push them out?

Hey, who says there's no innovation for the $8B/yr R&D budget? Look at that innovative new release Acrylic. Well...not really innovative...or even new...or even written by MSFT. MSFT's ability to ship is so pathetic that they're now forced to grab whatever apps they have around from past failed projects and/or acquisitions and then release them as "new". Is there ANY area of this company that's actually firing on it's given cylinder? Meanwhile $58, $36, $33, $28 and now $25 - see the trend? Short this POS - it's dead.

"No, they don't. Executives work on a completely different reward model than the grunts, and the rewards are (comparatively) obscene, whether or not the groups they own ship on time."

Obviously. If their reward system penalized them heavily for missing ship dates, then the latter wouldn't be the popular occurence that they are - at least at MSFT.

Like JimAll getting 75% bonus (it is public, take a look into last year's proxy statement) after he publicly states that LH is screwed up and that we lost 2 years for nothing... At same time with his 75% bonus, many smart, hard-working people in my org got 3.0's because of bell curve...

Like JimAll getting 75% bonus (it is public, take a look into last year's proxy statement) after he publicly states that LH is screwed up and that we lost 2 years for nothing... At same time with his 75% bonus, many smart, hard-working people in my org got 3.0's because of bell curve...

I'm sure, as one of the above posters suggested, you could simply take your concerns up with HR or your manager.

the same hr that decided that svc doesn't need a summer picnic this year - its already 06 and no 'save the date'. the beatings will continue until morale improves!!!!!!! i wonder if google down the street is having a summer picnic in hawaii again this year for all its employees. keep it real mini. keep it real.

Yep, Bottom line Ballmer has to many friends like Allchin to make the touch calls. The longhorn release is embarrasing, at least the NT4 to W2K release was due to the huge amount of improvements, but here that's no excuse. The bell curve is BS, often in some groups there is no 4.0 work so people get compensated becuase no manager wants to look bad. Lastly there is innovation this company only innovates when it feels the pressure (and often it's duplicating what's out there already). Other than patches what has the IE team done? We were late with the pop-up blocker, etc. Then we wonder why customers are angry...

Excellent article! As a recently departed IBMer I can tell you that this sounds so utterly familiar. In a sense I am happy that this happens to large corporations - it gives the new young blood opportunities to grow.

I got an unsolicited request for considering a MS career from its recruiter. The first sentence in his email is "What is your vision for Microsoft? If you could reinvent the company, what would you change?". I declined the request but offered how I would change MS if I am its CEO. I did that because I think if MS in the remote chance adopt some of my suggestions, it would probably benefit everyone. So here is the culture change I will bring to Microsoft the day I become its CEO:

"1. Carve internal divisions into autonomous companies each with its own CFO and independent accounting system. They still cooperate and their products can carry Microsoft brands. But they must be like trading partners. For example if MSN search division need Windows Server 2003, they must pay to the Windows division. Conversely, if Windows Server 2003 is not delivering pre-agreed upon performance/stability, MSN can switch to LInux and the Windows division has to give a refund to MSN. Also an engineer can chose to work for whatever divisions who will pay him most or who is most exciting.

2. Google is like a Mongolian army tearing through Europse now. To fight Mongolians, you must fight like Mongolians. MS has money but does not have as many innovative people. What business is similar in this respect but very successful? Right, top venture capitalists. MS has to stop being risk-averse and invest like venture capitalists into outside ventures. Invest 2 million a pop and take a 20% equity in 200 early stage firms (less than 10 employees) and take a hands-off approach."

Disclaimer

These are sole individual personal points-of-view and the posts and comments by the participants in no way represent the official point-of-view of Microsoft or any other organization. This is a discussion to foster debate and by no means an enactment of policy-violation. These posts are provided "as-is" with no warranties and confer no rights. So chill. And think.